Gold has always held a central position in the global economy and financial markets, being one of the oldest and most important tools for wealth preservation and hedging against financial and political fluctuations. In recent years, particularly during 2024 and 2025, gold prices have experienced exceptional movements, reaching new historical levels, bringing gold back to the forefront as a safe haven for individuals and institutions. Increased institutional and governmental demand, alongside unstable geopolitical and economic conditions, has contributed to gold's rise to unprecedented levels, driven by investors' desire to protect their assets from inflation and the decline of fiat currencies. In the Saudi context, despite the absence of a direct stock market for gold, the impact of the precious metal is evident in investors' decisions, whether through purchasing bullion and jewelry or through national mining companies like 'Ma'aden'. This article reflects a comprehensive analysis of gold's current performance, reviewing the factors influencing its prices, developments in global and local markets, the role of central banks, and a comparative analysis of gold with competing assets. The article also discusses how gold interacts with economic variables such as interest rates and the US dollar, in addition to reviewing the opportunities and challenges of investing in gold from the perspective of the Saudi financial market. Finally, the article highlights the most common questions about gold and provides reliable data from international and local financial sources to enrich the reader's understanding of this vital sector.
Definition of Gold and Its Economic Importance Through the Ages
Gold is considered one of the most valuable and significant metals in the economic and financial history of humanity. For thousands of years, gold has been used as a medium of trade and a store of value, becoming a monetary standard supported by the central reserves of countries. Gold is characterized by unique physical and chemical properties: it does not rust, is easy to shape, is relatively rare, and boasts an attractive color and lasting luster. These advantages made it the world's primary currency until the twentieth century, where most major economies relied on the gold standard to support their national currencies, providing financial stability and confidence in the global monetary system.
Throughout history, gold has played a key role in international trade systems and government reserves. During financial crises and wars, gold has always been the last refuge of trust, maintaining its value in the face of inflation and currency collapses. Even with the collapse of the Bretton Woods system in the 1970s, central banks continued to hold a significant portion of their reserves in gold. In modern times, the demand for gold is increasing not only for investment and hedging purposes but also in technical and medical industries, adding further importance.
In the Saudi context, gold jewelry still holds a special social and economic status, used as a tool for saving and investment among individuals and families. Saudi mining companies are also playing an increasing role in gold production, benefiting from the geological reserves of the country. Although gold is not traded directly on the Saudi stock exchange, its impact extends to many sectors and remains a fundamental indicator of capital movement and monetary policy trends both locally and globally.
Gold Price Developments in 2024 and 2025: Data and Performance Analysis
Gold prices experienced a wave of upward fluctuations in 2024 and 2025 that had not been seen in the markets for over a decade. By the end of 2024, the price of an ounce of gold fluctuated around $2,600, with prices dropping to approximately $2,596.89 per ounce on December 20, 2024, influenced by US economic data that bolstered expectations for interest rate hikes. However, this decline was temporary; gold quickly recovered to $2,623.82 per ounce by the end of December, driven by increased demand for safe havens due to escalating geopolitical tensions.
As 2025 began, the pace of gold price increases accelerated significantly. In the first quarter of the year, gold continued to break new levels amid expectations of easing US monetary policy and rising global uncertainty. By September 2025, gold achieved its best monthly performance in 14 years, followed by record jumps in October, reaching $3,875.32 per ounce at the beginning of the month and continuing its upward trajectory to $3,896.49 per ounce on October 3, an unprecedented historical level.
These jumps reflect an increase of nearly 49% in the price of an ounce within just one year, which was unexpected at the beginning of the period. In comparison to other precious metals, silver stabilized around $47.98 per ounce, platinum at $1,613.15, and palladium at $1,263, highlighting gold's exceptional performance during this cycle. When converting prices to Saudi Riyals, these levels indicate that the price of gold ranged between 14,500 and 15,000 Riyals, or equivalent to 467 to 483 Riyals per gram, making gold a focal point of interest for Saudi investors during this period.
Economic and Political Factors Influencing Gold Prices
Gold prices are influenced by a complex set of economic and political factors that interrelate, making the movement of the yellow metal's prices volatile at certain times and relatively stable at others. Among the most prominent of these factors is the monetary policy of central banks, especially the US Federal Reserve, where decisions to raise or lower interest rates directly affect gold's attractiveness as an investment asset. When interest rates rise, investment in bonds and income-generating assets becomes more appealing, potentially reducing demand for gold. Conversely, during periods of monetary easing or expectations of interest rate cuts, demand for gold increases as a safe haven.
The second factor is the performance of the US dollar, as gold contracts are priced globally in dollars. A weakening of the US currency typically leads to higher gold prices, and vice versa, as seen on several occasions during 2024 and 2025 when the dollar's value fell against major currencies and gold rose to record levels. Additionally, geopolitical tensions and global crises play a key role in driving investors toward gold, as demand rises for it as a hedge against economic and political risks, as seen with sharp price increases following political crises at the end of 2024 and the beginning of 2025.
Inflation rates cannot be overlooked, as they drive investors to seek assets that preserve their purchasing power, with gold being at the forefront of these assets. Furthermore, central bank activity in purchasing gold increases institutional demand and raises prices. Finally, changes in the global supply of gold, whether in terms of production or mine reserves, play a role in determining prices, although their impact is less powerful compared to financial and political factors.
The Role of Central Banks and Governments in the Global Gold Market
Central banks and governments play a strategic role in determining trends in the global gold market, as these institutions hold vast quantities of the precious metal within their official reserves. In recent decades, we have witnessed significant changes in the gold buying and selling policies of central banks, as many countries, especially emerging ones, have shifted to enhancing their gold reserves as a means of diversifying risks and strengthening their financial positions. For example, countries like China, Russia, and India have intensified their gold purchases in recent years to reduce reliance on the US dollar and bolster confidence in their economies.
During 2024 and 2025, international reports, such as those from HSBC, indicated that government and central bank purchases were among the main factors supporting the rise in gold prices to historical levels. The increase in institutional purchases was not only for protection against volatility or hedging against inflation but also as a strategy to strengthen balance sheets in the face of global financial crises. During periods of economic uncertainty or expectations of slowing global growth, central banks tend to acquire more gold, tightening supply in the spot market and boosting prices.
On the other hand, government policies regarding tariffs and trade regulations can affect gold movement, as occurred in 2025 when the US imposed tariffs on gold bullion imports, causing market disruptions and increasing immediate demand. It is worth noting that central banks do not trade gold daily like individual investors or financial institutions; rather, they conduct strategic buying and selling operations that impact the market in the medium to long term. This institutional role creates a solid base for demand for gold and enhances its status as a global strategic asset.
Gold in the Saudi Financial Market: Status and Impact
Although gold is not traded as a direct asset on the Saudi stock exchange (Tadawul), its presence and economic impact in the Kingdom are evident on several levels. Historically, gold plays a central role in Saudi culture, whether in personal savings, family investment, or even as part of zakat and charity accounts. Many Saudis tend to purchase bullion or gold jewelry as a means of preserving value and hedging against currency fluctuations and inflation, especially during periods of global economic turmoil or declines in the value of fiat currencies.
At the institutional level, national mining companies like 'Ma'aden' stand out as the main entity engaged in gold production within their diverse precious metals projects. Although Ma'aden's stock is not exclusively linked to gold but includes other sectors, the company's performance is partially affected by global gold price movements, especially since part of its revenue comes from selling gold extracted from the Kingdom's mines. Some Saudi banks also offer investment products linked to gold, such as gold accounts or deposits backed by physical gold, allowing individual investors to benefit from international price movements.
The Saudi market also interacts indirectly with developments in global gold prices, as changes in gold prices affect investment trends, market liquidity, and wealth distribution. Moreover, the policies of Saudi central banks (Saudi Arabian Monetary Authority - SAMA) in managing reserves may be influenced by global gold prices, especially when considering asset diversification. For this reason, gold remains a strategic element in Saudi economic thinking, both at the individual and institutional levels.
Comparing Gold with Precious Metals and Competing Assets
Gold stands out as the most preferred precious metal among investors, but it is important to place it in context within a broader range of competing assets, such as silver, platinum, palladium, as well as bonds, foreign currencies, and even modern digital assets. Each of these instruments has its unique characteristics, and the motivations for investing in them vary according to economic and market conditions.
Silver, for example, is used in a wide range of industrial applications, making it more volatile than gold and less stable as a pure investment haven. In 2025, silver prices stabilized around $47.98 per ounce, significantly lower than gold, reflecting the difference in demand and investment function. As for platinum and palladium, despite their industrial importance, their market volatility and relatively low liquidity make gold the first choice for long-term hedging.
In addition to metals, gold also competes with government bonds and strong currencies, especially the US dollar. During periods of rising interest rates or a strong dollar, money tends to flow into these income-generating assets, reducing gold's attractiveness. However, in times of crisis and inflation, gold returns to being the preferred option. Recently, digital currencies like Bitcoin have entered the competition, with some investors viewing them as an alternative haven, but gold's long historical track record gives it greater confidence in times of turmoil.
In Saudi markets, gold remains the most sought-after among precious metals, whether for investment, savings, or social and cultural purposes. The significant price differences between gold and other metals reflect gold's advantage as a strategic asset, and many investors prefer to diversify their portfolios between gold and some competing assets to achieve a balance between risks and returns.
Gold Prices Interaction with the US Dollar and Monetary Policy
The relationship between gold prices and the US dollar is one of the most important economic links in global markets, and gold prices often move inversely to the performance of the dollar. This is because gold is priced in dollars globally, meaning any change in the value of the US currency directly reflects on the price of gold for investors outside the United States. When the dollar weakens, gold prices become relatively cheaper for investors in other currencies, increasing demand and raising its price in dollars, and vice versa.
This interaction was evident during 2024 and 2025, where periods of dollar depreciation led to record highs in gold prices. For example, in October 2025, the dollar fell due to economic data and government crises in the United States, pushing gold to its historical peak of $3,896.49 per ounce. Conversely, when US economic data showed strength and expectations for interest rate hikes rose, gold declined as seen in December 2024.
US monetary policy plays a pivotal role in this dynamic. Raising interest rates increases the attractiveness of dollar-denominated assets (such as bonds), which may lead to a decline in gold. On the other hand, expectations of rate cuts or keeping them low drive investors toward gold as a hedge against declining returns on cash assets. This pattern recurs across different economic cycles, making it essential to monitor dollar and interest rate movements to understand gold market dynamics.
Gold as a Safe Haven in Times of Crisis and Economic Fluctuations
Gold has long been associated with the concept of a 'safe haven' in the minds of investors and financial institutions. In times of economic and political crises, individuals and central banks turn to gold as a tool to protect wealth from erosion caused by inflation, declining fiat currencies, or market crashes. Recent decades have seen numerous examples of this trend, from the 2008 financial crisis to the COVID-19 pandemic, to the escalating geopolitical tensions in 2024 and 2025.
In recent periods, demand for gold has risen significantly as concerns about the stability of the global financial system increased or signs of rising political risks emerged. For instance, political crises in late 2024 and early 2025 led to increased institutional and individual demand for gold, reflected in price increases to unprecedented levels. Additionally, government shutdowns or trade restrictions on gold trading further enhance gold's status as a safe haven.
However, it is important to note that gold is not an 'absolute' safe haven; its prices may decline during periods of economic stability or when the dollar is strong and interest rates are high. Nevertheless, gold's long historical record gives it high reliability as a long-term hedging asset, which explains its continued attraction for capital during various economic cycles. For investors in Saudi Arabia, gold remains a preferred option in times of economic uncertainty and doubt.
Investment Methods in Gold: From Bullion to Bank Accounts and Funds
Investment methods in gold have diversified significantly over the past decades, providing investors with multiple options that align with their goals and preferred risk levels. The traditional and most common method in Saudi Arabia and globally is purchasing physical gold, whether in the form of bullion, coins, or even jewelry. This method grants the investor direct ownership of the precious metal, but it requires dealing with storage and insurance issues.
At the institutional level, mining companies like 'Ma'aden' provide an indirect opportunity to benefit from rising gold prices by investing in their shares listed on the Saudi financial market. Although the company's stock performance is affected by several other factors, part of its revenue comes from gold production, making the relationship between gold prices and stock performance relatively close.
In recent years, some Saudi banks have introduced gold-backed accounts and deposits, where the client deposits a certain amount equivalent to their weight in gold, benefiting from global price fluctuations. Experienced investors can also access gold exchange-traded funds (ETFs) through global trading platforms, allowing them to buy shares representing a stake in the fund's physical gold inventory. These products provide high liquidity and flexibility in buying and selling, but they are subject to global market risks and trading conditions through non-Saudi platforms.
Overall, the diversity of options allows Saudi investors to benefit from gold price movements according to their investment strategies, while carefully considering the risks associated with each instrument and choosing the most suitable for their goals and portfolio.
Impact of Gold on Saudi Companies: The Case of Saudi Arabian Mining Company (Ma'aden)
The Saudi Arabian Mining Company (Ma'aden) serves as a prominent example of how Saudi companies are affected by global gold prices, even though its operations extend to multiple sectors such as phosphate and aluminum. Ma'aden was established as a strategic initiative to enhance the Kingdom's role in the mining sector, and its shares are listed on the Saudi financial market (Tadawul) under the symbol (1211).
Ma'aden manages several mines and projects for gold production in various regions of the Kingdom, making it one of the largest local producers of the precious metal. Therefore, the company's financial performance is affected by global gold market conditions: when prices rise, as seen during 2024 and 2025, the company's revenues from gold sales increase, positively impacting its financial results and potentially its stock price in the market. Conversely, a decline in gold prices pressures profit margins, especially if accompanied by rising production costs or a decline in global demand.
However, it is worth noting that Ma'aden is not a pure gold company, as gold constitutes part of its diverse portfolio of metals. This diversification helps protect the company from pure gold market fluctuations, but at the same time, it makes the impact of gold prices on its results less clear than that of globally specialized gold mining companies. For Saudi investors, Ma'aden represents an option for indirect benefit from rising gold prices, with the advantage of diversification and reducing risks associated with a single commodity's prices.
The company's financial data over recent years indicate that periods of rising gold prices are often associated with improved revenues and net profits, reflecting the correlation between the company's performance and the international gold market, albeit to varying degrees depending on the weight of gold in the company's overall portfolio.
Competition Analysis Between Gold and Modern Digital Assets
Digital currencies, led by Bitcoin, have sparked extensive debate about their potential role as competitors to gold in wealth preservation and hedging against economic fluctuations. Some promote the idea that digital currencies could represent 'digital gold' due to their limited supply and decentralization, making them an investment haven in times of uncertainty. However, in an objective comparison, gold emerges as a traditional asset with a long historical record in wealth protection, while digital currencies remain relatively new assets characterized by sharp volatility and regulatory ambiguity.
During periods of crises, as seen in 2024 and 2025, gold demonstrated its ability to attract institutional and governmental capital, while digital currencies remained a point of hesitation for many conservative investors and central banks. Additionally, gold's global acceptance, both in financial markets and local cultures, gives it a relative advantage as a reliable asset in times of crises. In terms of liquidity, gold has a vast and active market around the clock, allowing for large buy and sell transactions without significant impacts on prices.
Nevertheless, the growth of the digital asset market and increasing interest among certain investor categories seeking diversification or high returns cannot be overlooked. However, from a risk management perspective, gold remains a more stable option with less exposure to sudden shocks. In Saudi Arabia, investment in gold continues to hold greater priority, both at the individual and institutional levels, while digital currencies are viewed as complementary in high-risk diversification portfolios.
Recent News and Developments Impacting the Gold Market
The gold market experienced a series of events and developments during 2024 and 2025 that had a direct impact on the prices of the precious metal. Among the most notable developments were US economic reports that drove expectations for interest rate hikes, which led to a decline in gold to around $2,596.89 per ounce in December 2024. Conversely, geopolitical tensions escalated at the end of that same year, bringing gold back on an upward trajectory to reach $2,623.82 per ounce by the end of December.
As 2025 began, the pace of events accelerated, with gold recording record jumps in the first and second quarters driven by expectations of easing US monetary policy and global political disruptions. The peak of these developments occurred in October 2025, when a partial government shutdown in the United States coincided with a slight drop in the dollar, pushing gold to a historical level of $3,896.49 per ounce. The markets also witnessed the imposition of US tariffs on gold imports in August 2025, causing disruptions in supply and increasing immediate demand.
Notably, gold's performance during this period far exceeded that of other precious metals, continuing to attract institutional and governmental investors who intensified their purchases to bolster their reserves. These developments were reflected in extensive media coverage from major news agencies like Reuters and Bloomberg, increasing interest from individual and institutional investors in the sector. These events underscore the importance of continuously monitoring news and economic analyses to understand gold movements and its global markets.
Institutional and Popular Factors in Gold Demand in Saudi Arabia
Demand for gold in Saudi Arabia is shaped by a unique mix of institutional and popular factors. At the popular level, gold is part of social and economic culture; it is used in occasions, dowries, and religious events, and is considered a means of long-term saving and wealth protection from erosion. Many prefer to convert part of their savings into bullion or gold jewelry, especially during periods of economic uncertainty or rising inflation.
At the institutional level, Saudi banks and some financial institutions offer investment products linked to gold, such as gold accounts or deposits backed by physical gold, allowing a broader range of investors to benefit from price movements without needing to acquire physical gold. On another front, 'Ma'aden' plays a key role in local gold production, enhancing the Kingdom's status as a gold source in the region.
Institutional demand is also influenced by global central bank trends, as investors in Saudi Arabia monitor the buying and selling decisions made by these institutions worldwide. On the other hand, changes in gold prices affect individuals' decisions regarding saving and investment. For example, during record price increases as in 2025, there was a surge in interest in purchasing gold to benefit from upward market trends. This interaction between institutional and popular factors gives the Saudi gold market a dynamic character and enhances its stability compared to less diverse markets.
Gold in Zakat and Saving Accounts: A Sharia and Financial Perspective
Gold holds a unique position in the Islamic financial system, as it is considered one of the assets subject to zakat according to Islamic law. The zakat threshold for gold is calculated based on weight, and those who possess the threshold (approximately 85 grams) must pay zakat annually at a rate of 2.5% of the market value of the gold they have owned for a full lunar year. This legal aspect adds an additional dimension to the importance of gold in Islamic communities, including Saudi Arabia, where many are keen to track gold prices periodically to accurately calculate zakat thresholds.
From a financial perspective, gold plays an important role as a saving tool for individuals and families, especially during periods of economic instability or inflation. Gold retains its value over the long term, making it a preferred option for those seeking to protect their savings. Moreover, Saudi banks and financial institutions provide solutions to facilitate gold acquisition and zakat calculation, such as gold accounts or sharia-compliant investment funds.
In recent years, data from the Saudi market has shown an increase in demand for physical gold for zakat and saving purposes, driven by record price increases and heightened financial and religious awareness among individuals. Additionally, the digital transformation in banking services has facilitated the buying and selling of gold and electronic zakat calculations, reflecting the evolution of the local financial market and its integration with the sharia and economic requirements of Saudi society.
Challenges and Risks Associated with the Global and Local Gold Market
Despite gold's appeal as a safe haven and hedging tool, investing in it is not without challenges and risks that investors must consider. One of the most prominent challenges is sharp price fluctuations, as witnessed during 2024 and 2025, where prices can change suddenly due to unexpected political or economic events. This volatility makes it difficult to predict future prices and adds an element of uncertainty to investment decisions.
Other risks include changes in monetary policies of central banks, especially the US Federal Reserve, which may negatively affect gold prices when interest rates rise or the dollar strengthens. Additionally, government actions, such as imposing tariffs or changing import and export laws, may lead to market disruptions and price volatility.
At the local level, investors face challenges related to the availability of physical gold and the quality of available products, as well as risks associated with gold storage and insurance costs. Meanwhile, indirect investment through mining companies or banking products is subject to the performance risks of the companies themselves and local and international regulatory policies. Furthermore, the increasing competition from digital assets and new markets may affect future demand for gold.
From this perspective, investors are advised to study the market carefully and assess risks rationally, ensuring they diversify their portfolios and not rely on a single asset, even if it is as strong as gold.
Conclusion
In light of the above, it is clear that gold maintains its status as one of the most important investment assets globally and locally, thanks to its unique properties as a safe haven and store of value. Gold prices witnessed historical transformations during 2024 and 2025 driven by intertwined economic and political factors, including central bank policies, movements of the US dollar, geopolitical tensions, and increased institutional and popular demand. In the Saudi market, gold remains a preferred investment option, whether through acquiring bullion and jewelry or investing in mining companies and banking products linked to gold. Despite the significant opportunities it offers, it is essential to recognize the risks and challenges associated with price fluctuations and global policies. Therefore, it is crucial for every investor to carefully evaluate their financial options and consult a licensed financial advisor to ensure informed decisions align with their goals and financial situation. Gold remains a fundamental pillar in wealth management and diversifying investment portfolios in the face of ongoing economic changes.
Frequently Asked Questions
Gold saw a notable rise in 2024 and 2025 due to several key factors, primarily increased global demand for it as a safe haven amid political and economic tensions, expectations of easing US monetary policy, and a weakening dollar at certain times. Central bank and government purchases also played an important role in supporting prices, along with high inflation in many global economies. Collectively, these factors contributed to gold rising to historical levels exceeding $3,800 per ounce.
Saudi investors can benefit from gold price movements in several ways, including purchasing physical gold (bullion or jewelry) from local markets, investing in mining company shares like 'Ma'aden', or through banking products such as gold-backed accounts. Some global investment funds linked to gold are also available through international trading platforms. Each method carries its advantages and risks and should be carefully studied before making any decisions.
There is often an inverse relationship between gold prices and US interest rate policies. When interest rates rise, the attractiveness of bonds and income-generating cash assets increases, prompting some investors to move away from gold, which does not yield periodic returns. Conversely, during expectations of interest rate cuts or when rates remain low, demand for gold increases as a hedge against declining cash returns and inflation, leading to price increases.
Gold is considered a safe haven during most periods of economic and political crises, as it retains its value against inflation and currency fluctuations. However, its performance may decline during periods of economic stability or when interest rates and the dollar are strong. Thus, despite its high status as a long-term hedging asset, it is not guaranteed to be the best option under all circumstances, and portfolio diversification is essential.
Gold and silver are both precious metals, but silver is used more extensively in technical and energy applications, making its price more volatile than gold. Gold is considered more stable and a traditional safe haven, while silver is more sensitive to industrial changes. In Saudi Arabia, gold is typically preferred for saving and investment, while demand for silver remains lower despite its use in jewelry.
There are no listed Saudi companies that specialize exclusively in gold, but the Saudi Arabian Mining Company (Ma'aden) has gold production projects, and part of its financial performance is influenced by global gold price movements. Additionally, some Saudi banks offer investment products linked to gold, but the impact remains indirect compared to globally specialized mining companies.
Gold often moves inversely to the US dollar. When the dollar weakens, gold becomes relatively cheaper for investors outside the United States, increasing demand and raising its price in dollars. Conversely, when the dollar is strong or US interest rates rise, demand for gold may decline, and its price may fall globally.
Key factors include global interest rate policies, US dollar performance, the volume of purchases by central banks and governments, geopolitical and economic tensions, global inflation rates, and the level of supply from mining operations. Changes in any of these factors can lead to sharp movements in gold prices.
The zakat threshold on gold is calculated if the weight of owned gold reaches 85 grams or more, and 2.5% of the market value of the gold must be paid after owning it for a full lunar year. It is advisable to refer to specialized religious authorities or banks that provide gold accounts to assist in accurately calculating zakat thresholds according to daily prices.
The main risks include sharp price fluctuations, the impact of central bank monetary policies, changes in laws and tariffs, storage and insurance issues for physical gold, as well as competition from other assets like digital currencies. Additionally, indirect investment through mining companies or banking products carries risks related to company performance and changes in financial markets.
Investing in gold may be suitable for those looking to hedge and diversify their investment portfolios, but it may not be equally suitable for all investors. It depends on financial goals, acceptable risk levels, and expected investment duration. It is always advisable to consult a licensed financial advisor before making any investment decisions in gold or otherwise.